The market has started to fluctuate downward again in recent days, and sentiment has also become subdued. I’ve been reorganizing some trading notes lately and realized that several core concepts of Wyckoff Theory are particularly worth deep understanding, especially in this kind of market condition.

Let's start with the law of supply and demand. Simply put, when supply is less than demand, prices go up; when supply exceeds demand, prices go down. But why is Bitcoin long-term bullish? There are two fundamental reasons. First, the supply is inherently limited—this is an ironclad rule written into the code. Second, public recognition of it is continuously increasing, and demand is growing. In the short term, good news causes price increases and volume rises, while bad news causes price declines and volume increases— but these are just surface phenomena. The key is that there is a consensus about the asset; even if there is a short-term excess supply, it will eventually be absorbed. It’s like a bottle of water dropping from $100 to $0.10; demand will naturally pick up. But for altcoins without market consensus, it’s a different story—they may shine briefly but ultimately fade away. So whether excess supply can be absorbed ultimately depends on whether the asset itself has value.

Next, let’s look at the cause-and-effect law. This concept sounds a bit abstract, but it’s easy to understand in trading terms: the longer the consolidation, the higher the potential move. The longer the accumulation phase, the greater the energy stored, and the more violent the subsequent price swings. Wyckoff’s accumulation and distribution models are developed based on this logic. Interestingly, most of the time in the market, we only understand the reasons behind the results after they happen—that’s part of the complexity of trading.

Finally, there’s the input-output law. Simply put, price movements must be reflected in trading volume. Rising prices with increasing volume are healthy; rising prices with low volume should raise suspicion of trap setups. If prices stay flat but volume expands, it may indicate selling pressure. When breaking through key resistance levels, it’s crucial to see if volume is increasing; otherwise, you risk falling for a false breakout. Volume involves various states like no volume, low volume, double volume, high volume, and their coordination with price—indeed, it’s quite complex.

Currently, market sentiment remains bearish, but this is precisely the right time to understand Wyckoff accumulation. Changes in volume during the decline often foreshadow the subsequent trend. If possible, we can discuss specific strategies for attacking and defending under high-volume bars—this can be very helpful for actual trading.